What does an Asset Management firm do?

Interested in a career in finance? Get to grips with asset management firms and what makes them a vital component of the sector.

A helpful insight into the workings of asset management firms

Simply put, asset management firms manage funds for individuals and companies. They make well-timed investment decisions on behalf of their clients to grow their finances and portfolio.

Working with a group of several investors, asset management firms are able to diversify their clients’ portfolios. This gives them access to higher value options with better capital appreciation prospects, as well as mitigating the associated risk.

These pooled funds can be channelled into property, shares, bonds or other assets depending on the financial objectives of their clients. For example, the stock market can deliver fast returns, whereas property is ideal for long-term asset management.

How do asset management firms differ from others in the sector?

Financial firms can be crudely split down the middle – those on the ‘buy’ side and those on the ‘sell’ side. As asset management companies strive to grow a portfolio for their clients, their primary role is making smart purchasing decisions that will increase the overall value of their clients’ funds.

This differs greatly to investment banks, brokerages and insurance firms, which focus on giving access to funds being sold – such as stock purchases, insurance policies and mergers and acquisitions. 

Due to the nature of these firms, they tend to work with larger companies, whereas many asset management firms will work with high-wealth individuals. Clients usually put their faith in the expertise of asset managers, giving them a carte blanche role in the decision-making process.

The types of roles in asset management

Asset management firms are made up of several key individuals who enable the business to attract, manage and act on behalf of clients.

Financial analyst

These individuals play an integral role within asset management firms: researching investment options, conducting due diligence on potential opportunities and determining when best to buy and sell assets.

Economist

Keeping a watchful eye on the current market situation and outlook is essential for asset management companies. This is why many firms have a dedicated economist.

Asset managers

Armed with insights from financial analysts and economists, asset managers have the final say in asset management decisions. They liaise with clients and ensure their best interests are cared for.

Read our guide to asset and investment management graduate schemes. 

The skills asset management firms look for

• Analytical skills – you look behind the headlines and data to identify meaningful trends
• Confident decision-making – you are decisive, able to make informed choices based on facts
• Strong communication – you are able to explain your decisions and foster good relationships
• Time management – you deal with pressure well and can react quickly to events
• Initiative – you’re always on the lookout for new opportunities and solutions

Now you know about the key skills, learn how to demonstrate them in investment and asset management. 

Key asset management firms

Many leading firms in the financial sector offer asset management as a service but there’s also a whole host of prestigious fund management firms that specialise in this area, the largest of which is BlackRock. Other major players in this field include:

• Insight Investment
• Commerzbank AG
• Schroders
• BNP Paribas
• Silicon Valley Bank

Learn more about the leading graduate employers in asset & investment management. 

Did you know?

• According to The Telegraph, British-based asset managers are responsible for funds worth more than £5.4 trillion.
• Mutual funds are thought to originate in the Netherlands, where King William I created an investment company in the 19th century.
• According to PwC, funds under asset management are set to grow at a compound interest rate of nearly 6% over the next four years. 

Asset management firms have widespread appeal for graduates, giving you the opportunity to play a pivotal role in growing the finances of your clients by using industry knowledge and reading between the lines. Learn how much you can expect to earn as an investment and asset management graduate.